News | Owners Corporation Network


Why some strata services are essentially a rip-off

With all the horror stories of what goes wrong when an apartment catches fire, you would never want to skimp on safety. But what if you were paying over the odds for safety inspections that were followed by upgrades that you didn’t really need but were recommended by the same people who did the inspection? Oh, and the inspection was compulsory. A year ago this column exposed the scandal of “embedded networks” – where an infrastructure supplier would do a deal with the developer of a new building to install their equipment for free, provided the developer agreed to "dupe" the buyers of their apartments into signing up for an extended and inflated maintenance contract. Recently we were told about another way of extracting money from apartment owners, that also may not always be entirely honest. This potential scam comes under the general heading of “essential services”, which is big business if the number of companies that have those two words in their title is anything to go by.
The Australian Financial Review
Jimmy Thomson

60 Minutes - Buyer Beware Part 1

Here's an incredible, not to mention shameful, statistic about Australia's building industry. 85% of new high-rise apartment towers are defective. The rate of shoddy workmanship has increased dramatically as governments around the country have encouraged more developers to build more high-density housing as a way of containing urban sprawl. As a result, many unsuspecting buyers, trying to put a roof over their heads, are learning a painful lesson: that the cost of cutting corners is very expensive.  But as Sarah Abo reports, there is one man determined to fix all the damage. Let's hope he does.  As one affected owners says on camera "Buying an apartment shouldn't be a gaol sentence".
Channel 9 60 Minutes Program
Sara Abo

Apartment owners win legal victory over combustible cladding

A group of apartment owners battling to have combustible cladding replaced on their buildings have won a landmark legal victory – giving hope to the thousands more facing similar dangers. In an Australian first, a major building company which installed timber-PVC Biowood cladding on four multi-storey apartment blocks in Ryde has lost its appeal against being forced to rectify the work. Further, if it doesn’t reach an agreement with the owners on a timetable for the remediation, a date will be set for them by the state authorities. Currently, there are two class actions underway in Australia against the manufacturers of cladding, and a call went out earlier this week from the peak body for apartment owners, the Owners Corporation Network, for other affected strata schemes to join. OCN administrator Karen Stiles said if a building had cladding it could register to join the class action, which is independent of any other action the scheme might be taking. “OCN supports owners’ rights to pursue their full legal rights in terms of building defects,” she said. “Of course, it is wrong that they have to – unlike other consumers saddled with faulty products like Takata airbags or Infinity Cable where the product is recalled by the manufacturer at their own cost. “But that’s the current state of Australian play sadly. Hopefully our owner advocacy will improve the situation for future owners.”
Sue Williams

Why the ‘ugly cousin’ of property urgently needs more attention

Nearly 20 per cent of all ‘households’ in the ACT are not, in fact, in houses at all. And it’s estimated that during the 2030 decade, half of all Australians will reside in apartments and Canberra is leading the trend, but we’re completely unprepared as an industry. The strata sector is still behaving as though the landscape consists of petite unit buildings with quaint lawns and two flights of stairs that need cobwebs swept away periodically. Today, we’re effectively building massive communities within suburbs. But little is properly understood about the needs of people and communities choosing strata living. The UNSW City Futures, Australasian Strata Insights Report, is about the only decent detailed analysis reports ever produced on the Australian strata sector. That alone is concerning. And the lack of decent analysis means we’re lagging decades behind on national regulatory frameworks as a result. Economically speaking, this industry (sic, should be 'sector') generates more than $6 billion annually just in sending out tradespeople, cleaners and all the rest of it. Another billion-plus dollars a year is generated through the engagement of accountants, lawyers and other professional services. No one’s ever really paid much attention to the strata management industry, and that’s about to become a problem. The strata sector is profoundly influencing our social and economic landscape. The reality is that we have to start talking about it. The industry is growing faster than our determination to put regulatory frameworks in place to protect both residents and investors.
Riot Act!
Chris Miller

What would Reg say?

Meet Reg, he was a gift to me from the Office of the Building Commissioner (OBC) team last week. Some of you will have seen these neat 3D printed characters where the head is able to nod-yes or shake-no. Reg immediately become a bit of a mascot, he could become an oracle. We are now just a month away from the commencement of the NSW Building Commissioner's powers (RAB Act) becoming effective on the 1st September 2020. The occasion also marked the start of the first of the Occupation Certificate Auditors checking in. We will now start an intensive period of onboarding the new OC Audit team and conducting some trial operations. We will do this in conjunction with several UDIA members who have offered up projects to enable our team to conduct proof of process and to demonstrate to industry how we are intending for the OC Audit process to work. We will write these trial projects up as case studies. They will focus on collaboration and learning. But, the inevitable conversation turned to one of 'what would Reg do?' as a series of scenarios were discussed. Here are some 'What would Reg advise?' thought pieces
David Chandler

Watchdog warns developers against forcing apartment buyers to settle

The state's construction tsar is warning some developers may try to pressure buyers to settle off-the-plan apartment purchases in the next five weeks before tougher new laws designed to clean up the industry come into force. It has prompted Building Commissioner David Chandler to urge buyers, certifiers and builders who experience pressure to complete work on apartment buildings, or settle on purchases of units, before September to report it to Fair Trading for investigation. Karen Stiles, executive officer of the non-profit Owners Corporation Network, said the start of the commissioner's new powers would result in "real consumer protection" for buyers of off-the-plan apartments. "The threat to dodgy developers and builders will be very real and include not being able to obtain an occupation certificate," she said. "No occupation certificate means no sales until the building meets the building code of Australia."
The Sydney Morning Herald
Matt O'Sullivan

Back to the future: unit owners hail return of public certifiers

Unit owners have welcomed moves for the return of public certifiers to improve building quality in the ACT, but say architects and engineers also need to be involved in project delivery from start to finish. Owners Corporation Network ACT president Gary Petherbridge said Mr Ramsay was on the right track with public certifiers for multi-unit developments and developers having to be fit and proper persons to be in business, but architects and engineers should also have to be registered and involved in projects from the drafting of detailed plans to completion. He said architects were often used to produce ”pretty pictures” for selling the projects and not retained throughout construction. Mr Petherbridge, who began calling for a return to public certifiers a decade ago, said it was better late than never that Mr Ramsay now understood that multi-unit buildings were the issue. ”The developer isn’t going to be the owner when it finishes, there are going to be 600 owners, so they are the ones who need protection,” he said.
Riot Act!
Ian Bushnell

Omni Bridgeway to chase Fairview's insurers in cladding action

Litigation funder Omni Bridgeway is going after the insurers of cladding supplier Fairview Architectural, after the maker and supplier of Vitrabond combustible cladding said the legal costs of defending itself in a class action suit put the company at risk and put itself into administration. Omni Bridgeway – formerly IMF Bentham – which last year launched the class action against Fairview, the country's second-largest supplier of combustible panels, shrugged off the move, saying it was used to respondents going into administration or liquidation and was seeking to continue the case against Fairview's insurers.
The Australian Financial Review
Michael Bleby

2GB - Calls for government to help pay for flammable cladding removal

Michael McLaren, 2GB Overnight Program host, is joined by Karen Stiles, Executive Officer of the Owners Corporation Network, a not-for-profit body representing apartment owners, who claims the federal government’s $25,000 Home Builder grants would have been better spent fixing apartment buildings cloaked in flammable cladding which posed a risk to lives.

'They should help': Sydney cladding crisis leaves big bills for owners

The large yellow cladding on the side of the 19-storey Distillery apartment tower in Pyrmont has made it one of the most recognisable residential high rises in the inner Sydney suburb. Yet the flammable nature of the cladding has also made it an expensive problem for its owners, who are finally nearing the end of a three-year saga to remove it that has cost them more than $3 million. With thousands of apartment owners across Sydney facing a similar predicament, owners of the Distillery tower say the NSW government needs to help pay for the expensive work removing cladding that only a few years ago complied with regulations. "They should be helping pay the poor old apartment owners overcome a problem created by lax rules," said Colin Knowles, the building's former strata committee chairman and retired engineer. Owners Corporation Network, a not-for-profit body representing apartment owners, said the federal government's $25,000 Homebuilder grants would have been better spent fixing apartment buildings cloaked in flammable cladding which posed a risk to lives. "Once again, strata owners have been left to fend for themselves," executive officer Karen Stiles said. The Victorian government is spending $600 million to fix dangerous cladding on buildings, and last month announced plans to accelerate the work to create more jobs.
The Sydney Morning Herald
Matt O'Sullivan

Transnational data report delivers insights into Australia and New Zealand’s strata sector

A new report examines the growth and demographics associated with apartment living in Australia and New Zealand. One in five Australians and one in twenty New Zealanders live in strata-titled properties, according to a new transnational report from UNSW’s City Futures Research Centre. There are almost 3 million strata and community-titled properties in Australia, with an insured value of over $1.1 trillion, representing a growth in value of over $100 million in the past two years. New South Wales currently has the largest number of strata lots (units) (more than 960,000), but Victoria has the most schemes (developments) (almost 116,000). The Australasian Strata Insights 2020 Report provides a comprehensive picture of the strata industry in Australia and New Zealand, extending on the first Australian National Strata Data Analysis in 2018 with the inclusion of New Zealand data. It provides an invaluable tool for policy makers instigating changes to the framework for the strata industry.
City Futures Research Centre
Hazel Easthope

Dubai's Zen Tower reopens two years on from devastating fire after Dh20m revamp

A Dubai "community" has been reborn as residents return to a tower block devastated by fire two years ago following the completion of a Dh20 million refurbishment project. An electrical fault in a first floor apartment sparked a blaze which tore through Zen Tower on a baking hot summer's day in May, 2018. Thankfully, no lives were lost as wind speeds of 30 miles per hour whipped-up flames across flammable cladding that encased the 68-flat high rise in Dubai Marina. Residents who founded a new owner’s management association expressed huge relief at finally being able to move back into their homes this week. Similar flammable aluminium composite panel cladding used across the country has been blamed as a major factor in scores of tower block fires in recent years. The most recent at the Abbco Tower in Sharjah on May 5 led to calls for as many as 150 buildings in the emirate to have similar cladding replaced.
The National
Nick Webster

Opal Tower residents launch legal action

Residents of Sydney's troubled Opal Tower complex have launched legal action against the NSW government, claiming it developed the "concrete slum". Opal Tower resident and body corporate chairman Shady Eskander on Monday said the Sydney Olympic Park Authority was the vendor of the 392-unit apartment building. The 29-year-old pharmacist said the owners' corporation had filed a new legal proceeding against the authority and the state government in the NSW Supreme Court. The action followed a report by more than 12 independent experts that allegedly found more than 500 common property defects, with residents hit by a $1.1 million insurance premium.
Channel 7 News

'It's not fair': Sydney cladding crisis threatens to 'crush families' financially

The owners of 130 buildings in inner Sydney have been told to replace flammable cladding or reveal more details about the composition of materials used, leaving individual apartment owners facing bills running into the tens of thousands of dollars. The breadth of the cladding crisis in just one part of the city has led to fresh calls for the NSW government to follow Victoria in funding rectification work, partly given the financial pressure owners are already under due to the coronavirus-induced recession. Waterloo resident Adrian Shi was shocked to discover that he would have to pay $25,000 over the next year to remove combustible cladding from his building in the inner-southern suburb. "If it was just a few thousand dollars it would be acceptable but a $25,000 hit comes at a very bad time. It is not fair for the owner to take full responsibility," he said. "The government should give us some help such as a long-term loan." Greens MP David Shoebridge, who chaired an inquiry into building standards, said the cost of fixing flammable cladding in NSW would be "well north" of $1 billion, which would be borne by homeowners "let down by decades of deregulation".
The Sydney Morning Herald
Matt O'Sullivan

The Office of Building Commissioner's Director, Matt Press is now hiring a program manager and project officer

The Office of the Building Commissioner (OBC) has just finished the initial appointments to commence the Occupation Certificate Audits from 1 September 2020. The talent pool of applicants was very impressive. Experienced Designers, Contractors and Certifiers with 15-years experience will soon be in the field to work with the Building Commissioner. A powerful new tool is being built inside BRD to provide a single view of all projects that are visited by our regulatory inspectors. Here, the view combines the view of our safework and building inspectors. There is a clear correlation between unsafe, poorly managed sites and the quality and compliance of the end build. The game is changing in NSW for those who still think they can build shoddy buildings. It is really time for developers, builders and certifiers to come to terms with a very changed construction landscape. We have commenced a program of case studies that will help the industry to see what we are finding and how they will need to adjust going forward. 
David Chandler

What Members Say

"The whole strata community owes a huge debt of gratitude to you and the OCN executive. Much appreciated."

Robert, Darlinghurst

"I am very pleased with my membership of OCN, the discussions through sharing emails is very valuable in increasing my knowledge of strata living, the laws and EC responsibilities. I think I am better armed to tread the minefield of the managing agent responsibilities and the necessary action of the EC to monitor the contradictory interests of the agent."

Jim, Wollstonecraft

"I so appreciate being part of the OCN email forum. It provides a great opportunity for sharing ideas and learning"

Ingrid, Neutral Bay

"I must say that I have enjoyed and found consolation in the discussions that have been part of the email chain (forum). I did attend one general meeting and found that it was informative and the people "running the show" were knowledgeable and dedicated to the tasks that had taken on. In short, well done. You and the committee have and continue to support the Strata Community in a very professional manner."

Greg, Parramatta

"Nothing is easy in Strata World and we have been in building defects “mode” for some years – hopefully almost at an end but that process has been most demanding and difficult but again – greatly helped by the experience and wise counsel of other members of OCN."

Pat, St Leonards

"Keep up the good work, as many (if not most) strata schemes need your help, advice and representation at all levels of government."

Jann and John, St Ives

"I belong to OCN because of its professionalism.  I have found the meetings I have been to extremely well presented, to the point, and of course very topical and informative. Speakers on the whole certainly know their topic.  My role of Secretary last year was certainly assisted with the coverage regarding TPG & other subjects. Member newsletters are also of benefit as the topics are specific to strata matters."

Graham, East Balmain

I have enjoyed attending the quarterly OCN meetings and the exchange of emails between other Executive Committee Members and think OCN is playing an increasingly important role as a voice for strata dwellers and representing us at Government level. I wish the organisation continuing success in the future."

Pauline, Kings Cross

"The [forum] response to my question was amazing and really useful.  The OCN community is wonderful so thanks."

Jenny, Killara

"I would like to thank you all for the important effort that you are all putting in to look after apartment owners and tenants. It is so valuable and you are heroes. I would not have been able to deal with my duties as a strata chairman without your advice and assistance." 

Angela, Mascot

"The OCN is invaluable – many thanks."

Bill, Surry Hills

"OCN is proving invaluable"

Sue, Neutral Bay

"Thanks to all at OCN for your continuing efforts to keep us up to date with current strata information and has been very helpful to us"

Kate, Coogee

"When my wife & I first encountered a problematic Executive Committee I heard that OCN was a great help (from a Strata manager whom I knew) so we both joined and have gratefully used the on-line information sources. We continued to happily rely on OCN’s assistance when we progressed to Committee status & later as Chair & Secretary of our Committee. I still use OCN in my current role as Treasurer."

Peter, Chiswick

"Thanks to OCN for being such a rich resource of trustworthy information about strata matters."

Peter, Chiswick

"I wanted to extend my personal thanks for the very informative & interesting event today. The OCN team did an outstanding job in the organisation of this event & I enjoyed it thoroughly. The quality of speakers, the flow of conversation & interaction from the attendees - first class …& of course, the amazing Jimmy T - always a delight."

Sue, Epping

"OCN does a great job in providing a really valuable service to Strata owners."

Lois, Wollongong

"I am sure my appreciation of your good works is echoed by many in the Stratasphere. Keep up the good work."

John, Elizabeth Bay

"The OCN is probably one of the best, most informed and most informative groups I have been involved with."

Alan, Maryville

"Once again, being able to discuss such things through this forum, helps clear the mind, puts things into perspective and helps one to understand their rights and to form a strategy if needs be. As a simple EC member trying to do what is in the best interests of lot owners, I truly value OCN and am grateful."

Pamela, Point Lookout